Only locals get the jobs? (Kuala Lumpur)

I just wanted to share some experiences from my (admittedly short) job hunt so far and ask you if you had similar experiences.

I've applied for a number of jobs in the past 2 weeks, yet my inbox remains suspiciously empty. So I started working the phone. And what a surprise it was! Most of the people I talked to tell me that they do not hire foreigners! I applied to both international and Malaysian companies, but the mantra seems to be the same. When questioned, one HR lady said that "the government tells us to hire local talent"... I said that I consider myself very local since I now live here, but that failed to make an impression. Conspiracy theories abound, I don't think that the government tells anyone anything and the actual hiring manager doesn't care if you are a foreigner or not. If you have the right qualifications and the right attitude, then they will want you whatever nationality you are.

Now that I vented my frustration, I wanted to ask for your experiences.

Is it the HR department that is the actual obstacle in getting a job? Is the only way to get what you want to aggressively try to find a contact person in a particular company and get them to pass your CV to the right people? Is it a waste of time to event try to apply for positions advertised on websites such as Jobstreet?